A flag pattern is a technical analysis chart pattern that can be observed in the price charts of financial assets, such as stocks, currencies, or commodities. It is considered a continuation pattern, indicating that the prevailing trend is likely to continue after a brief consolidation or pause.
The flag pattern is formed by two main components:
Flagpole : The...
Flag Pattern:
A flag is a chart pattern formed during a counter-trend move after a sharp price movement.
Why is it called Flag?
It is named because of the way it reminds the viewer of a flag on a flagpole.
What does the Flag Pattern represent?
It signifies trend reversals or breakouts after a period of consolidation.
The five main characteristics of a Flag...
The flag shape. Bullish and bearish. Relationship with trading volume.
The formation of the “Flag” and volume indicators are closely interrelated.
It usually happens like this:
1) The formation of a flagpole in a fast market is accompanied by an increase in volume indicators. Panic buy or panic sell pushes the price up / down the quickly.
2) During the further...
